Shipping Act 1984: Competition Issues in Liner Shipping - United States

Shipping Act 1984: Competition Issues in Liner Shipping - United States
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Shipping Act 1984: Competition Issues in Liner Shipping - United States
Introduction
A substantial chunk of the international goods trade is done via the sea. It is currently estimated to be at 90% of the entire trade (Voudouris, 2012). The U.S. Shipping Act 1984 was ascended into law in 1984 by the then President Ronald Reagan. The premise behind the Act was to accomplish very important objectives that would make the shipping practice worth the while and offer more benefits to the economy of the U.S. To begin with, it was to ensure the establishment of a regulatory process that was non-discriminatory in situations that involved the carriage of common goods by water (Vitale, 2015). This was to be achieved with the least interference as possible by the government or any regulatory costs. Secondly, it was to address the availability of a system of transportation that was efficient and economically sound with regard to the U.S. trade, in line with the international maritime rules and procedures. The third aspect under review was creation of a well-defined U.S. bound fleet of vessels that had the capability to live up to the security requirements and finally, through efficiency in the ocean transportation, achieve a competitive advantage in the international market (Vitale, 2015). This paper seeks to address those competition related issues in the liner shipping business especially in the United States as per the shipping Act 1984. It will discuss in short the rationale that exists behind the exemptions as per the level of completion in the shipping industry as has been historically documented. The relevant legislations regarding the global cooperation agreements will also be discussed at length.
History of the U.S. exemption for Ocean Shipping conference
Seaborne transportation o goods has been structured into three major segments of Bulk shipping, liner shipping and specialized shipping (Rodrigues, & Vitale, 2015). In the U.S context, the Competition Law is also known as the Antitrust Law. Initially it was referred to as restrictive trade practices law in Australia and the U.K. the main purpose for the formulation of these laws is to get rid of the restrictions involving the arrangements among the concerned business enterprises in the business of shipping and as such has a variance from one country to the next. It has to control any threats to the business that involves the players in the industry. By so doing, they actually check the cases of undue competition which have lasting effects on international commerce and also with possibility of hindering economic development (Premti, 2016; OECD.org, 2017).). The antitrust exemption therefore, is the oldest surviving Shipping Act of 1916. So much has happened in the area of exemptions with regard to agreements on fixing of prices, and other discussions on the antitrust legislations with a focus on ocean shipping carriers. Also discussed in the 1916 Act were matters related to pooling arrangements, rates for shipping and the allocation of routes for the purpose of shipping. All the agreements reached were supposed to receive the approval of U.S. Shipping Board, a b...